The following table shows the payoff matrix of the two firms (Firm X and Firm Y)in dollars when they advertise and when they do not advertise. Table 25.1 According to the Table 25.1, if the firms collude and decide not to advertise their combined payoff is:

Question

The following table shows the payoff matrix of the two firms (Firm X and Firm Y)in dollars when they advertise and when they do not advertise. Table 25.1  According to the Table 25.1, if the firms collude and decide not to advertise their combined payoff is:

Quizplus · Accepted Answer

If the firms collude and decide not to advertise, they both receive a payoff of $165 each. Therefore, their combined payoff will be $330. This is the highest payoff for both firms, so it is the best choice.

The Following Table Shows the Payoff Matrix of the Two